tv Bloomberg West Bloomberg September 28, 2015 11:30pm-12:01am EDT
brendan: the tech industry rolled out the red carpet this weekend for india's prime minister. i am brendan greeley. i am not emily chang. she is out today. this is "bloomberg west." apple sells 13 million of its new iphone. this time, the numbers include china. plus, let's stay on apple. ceo tim crook -- cook and screenwriter aaron sorkin declare a truce. and is there life on mars? that was not right, but maybe,
nasa just announced it discovered water on mars. water is a necessary precursor to life. product tie-ins, the upcoming matt damon epic coming soon. now to our lead. india and silicon valley. india's prime minister went on a tour with silicon valley's tech elite. they tweeted out pictures from meetings with elon musk, google's executive team, and tim cook. facebook's ceo mark zuckerberg held a town hall mark zuckerberg wore a tie, the prime minister did not. he did speak in hindi and teared up a little. you were there this weekend on silicon valley. what was in this visit? what is he getting out of it? >> you to look at it from the government of india perspective , it explored the trade between u.s. and india, $100 billion. $60 billion is in ip services. when you look at his objective of creating a digital india,
he's looking at silicon valley from a technological perspective. he is looking at it from an investment perspective more importantly, when you get 13% of -- 15% of the startups in silicon valley are done by indians, he is looking at this about bringing the same environment india himself. brendan: step one in rolling out a digital india will be putting in the necessary infrastructure in place right if you look right now, 85% of the people in india do not have access to the internet. how can silicon valley help him do that, roll out the very expensive infrastructure? guest: 85% of the population does not have access to the internet.
but when you look at what it was three years ago to where it is now, india has 100 million plus users to 300 million to the last three years. i think there is an exponential growth taking place among the user base. the challenge is trying to come up with a technology which does not look at the old form of delivery of broadband to 660,000 villages in india itself. i think we have to be creative. we have to look at some alternative way to reach out to villages. i think is a challenge, it requires a lot of investment, a lot of new technologies, and that is what he is looking for. brendan: the u.s. is going to the same challenge right now. somebody has to pay for a rollout outside of the government. private companies, or silicon
valley. google is rolling out fiber to many cities here. what is the right mix of those three, foreign investment, domestic telecoms, and government and expense? guest: i guess government does not have the money. let's be very honest about that. we have to have some kind of a model which is basically public-private partnership. which does give r.o.i. to the investors. i think government has to be open to silicon investors coming to india, and making sure they generate their profit, and at the same time deliver broadband to the rest of the country. brendan: what structure has to be in place in india? right now, the foreign direct investment is $34 million -- $34 billion. what has to happen for that to increase, other than the internet infrastructure. what does he have to put in place? guest: i guess one of the most important things that has to
come into play transparency and predictability in policymaking. unless you are able to deliver that to the investors in the boardroom, individuals, organizations, will not come in and invest. that is one. second is easy of doing business. india is ranked 142 out of 182 economies out of the world bank. we have to go up the chain and make it easy for people to invest in india, easy to get permits to build hotels or factories. unless that changes, it will be tough to get investment into the country. brendan: when we talk about silicon valley direct investments a lot of the challenges are the exact same as any other industrial investment. guest: yes, and now also. when i say now, what we are seeing, especially in e-commerce, a lot of silicon valley investment coming from
private equities into companies all the e-commerce companies leveraging this for a wide variety of services. either on the shopping side or taxi services. the thing that seems to be moving on its own. where we need to look at investment in more in the large infrastructure, which is not silicon valley, but the ease of doing business has an impact on silicon valley also. brendan: where you are in washington dc, it seems like indian businesses, or the most important lobbying goal for silicon valley is getting the right visas in place. how important is that for india or is that just a silicon valley goal? guest: i think it is as important for india as it is for silicon valley. today, the h-1b visa it does have an impact on indian companies who want to send in more resources helping u.s. companies become much more
cost-effective. i think today, the limits does have an impact. what happens is a lot of the services are done from india which can be done here. i think both indian companies and silicon valley are focused on trying to increase the h-1b visa issue. brendan: i wanted to play this quote for you but we are running out of time. yesterday i spoke to the head of the state bank of india, she said they are trying to rollout banking access to india. the actual physical infrastructure of a bank is just as important as the digital infrastructure as they make investment choices. how does it get that right between rolling out physical things both for internet access and banks, and the digital access? guest: if you look at the last six months, this government has been able to open bank accounts 180 million for indian citizens. that is without any physical
banking infrastructure. more focused on digital infrastructure. my recommendation would be in the new model, physical infrastructure, buildings for banks, are not as critical as digital connectivity because you can still do banking from your mobile phone. rather than walking into a bank itself. brendan: dr. aghi, thank you very much. of course the prime minister visiting silicon valley, at times having an emotional meeting with mark zuckerberg among other west coast -- moving on, sadly a truce has been declared between two heavyweights. it all happened when tim cook appeared on stephen colbert's show and about the new jobs movie. >> he was a joy to work with, and i love him dearly and i miss
him every day. i think there are a lot of people trying to be opportunistic. i hate this. it is not a great part of our world. brendan: aaron sorkin is the guy who wrote the jobs movie. he also wrote the zuckerberg movie. that is kind of his thing. he told the hollywood reporter that if you have a factory full of children in china assembling phones for $.17 an hour, you have a lot of nerve calling someone else opportunistic. the truth tim cook did not handle. over the weekend he apologized saying he went too far. apple says it sold a record number of iphones over the weekend thanks to china. but is the chinese market getting oversaturated? plus, big news from 140 million miles away. nasa says there may be liquid water on mars. details next. ♪
brendan: welcome back to "bloomberg west." i'm brendan greeley in for emily chang. apple is reporting record sales of its news iphones. more than 13 million. that compares to only 10 million sold for the debut of the iphone 6 and six loss last year. -- six plus last year. but here is the thing, this year those numbers include sales in china. that is not the case for the initial release of the last models. the question, how much did china contribute to the sales numbers in the debut weekend? joining me is the vice president of mobile research. john jackson. they both attended the iphone of an earlier this month.
adam, start with you. help me with these numbers. apple said it was a record, but numbers always grow. what does a record mean? what did it consist of. guest: every year apple has been releasing the iphone they hit a new record. it jumped to 13 million from 10 million. but you are right, this includes china, which analysts say is equal to as much as 3 million of that number. so if you take us back out the numbers are about flat. you did see apple's stock today kind of as investors noticed, the stock folded. brendan: john jackson, in boston, help us understand what the market looks like in china right now. there are two different markets, the high-end and a low-end market. is the low-end market
oversaturated at this point? guest: it may well be oversaturated. if we look at q2 of 2014, until q2 of we saw the high-end 2015, market, $400 u.s. selling price and above almost doubled from 8.8% of volumes to 16.4% of volumes. if you look at where apple plays in that market, that $600 and above threshold, that market more than doubled. it went from 4.9% to 12.3% in that one year span. the indication is that the high-end of the chinese market is really almost all apple. they are killing it at the high-end of the chinese market and expanding it. let's not forget, this is a company that has been in the business of putting wind in its own sales for quite some time now. the low-end of the market is oversaturated and you have a couple of rock stars down there. but i think it's pretty clear apple does not want to play there.
brendan: let's stick with the high-end. in china, one of the things we have seen his industrial numbers plummeting, equity indexes plummeting. crackdown on parity. does the future of high-end look like? guest: i'm not sure there is a stop to it to be honest. you look at these numbers, apple numbers in china, as a percentage of all iphone shipments, adam is right on with this 3 million number. 13.4% of that market last year, growing to 17.8% of that market in q4. and then 23.7% in q1 to 26.7% in q2.
apple continues to grow this market, economic regulations and headwinds be darned. obviously we will see what happens in the coming corner. brendan: should we think of it as just an iphone company? guest: that is without a doubt, it's most important product. it is the center of their universe and a lot of the other things they do orbits around it at this it accounts for more point. than 60% of the revenue and an even bigger or shut of their best portion of their profits. everything is centered around that. but the percentage of their business that has been growing, they are trying to offset that with other things. they introduced apple watch, but that has not really taken off. ipad sales have also been falling. so you are seeing iphone take of a bigger and your piece of apple's business. brendan: how important is the launch weekend? is it like a hollywood movie? do we watched launch weekend to see what it will make overall? guest: it is an important metric but not the most important one. , we're talking about these figures are somewhat skewed because of the introduction of china. what will be a better barometer will be in january, when apple releases figures for how they do in the holiday quarter.
the company has been really concentrating around the last three months of the year. how they do the end of the year will really be the best metric of how the company is doing. brendan: john, what is the next likely growth market for apple? is it an emerging markets play? where does it go next? guest: you just had dr. aghi on, and what he was describing is there are opportunities, if you're an optimist, they continue to hide in plain sight in these emerging markets. just you be some perspective, in 2014, china was 10 times the volume of the next largest emerging markets, russia, and then brazil. india is a distant fourth. if you're optimistically and that's inclined, there is a lot of upside left to be mine to these markets. as adam said, i think apple understands very well it has this dependency right now. there is an imperative for the home, car, wrist, while it what
has done for the iphone. brendan: what we learned is that apple is not on china play, it is on break play. an update from space. nasa scientists say they discovered strong evidence of liquid water on mars. that is a precursor to any hope of finding extraterrestrial life on mars. images show long dark strains on the terrain that reached hundreds of meters long in warmer months, but dry up in autumn. scientists already knew mars had frozen water, but this is the first concrete evidence of water in liquid form. really definitive way to determine whether there is life on mars for now is to collect rocks and soil for analysis on earth. that is something a u.s. lander is set to do in 2020.
a™ brendan: time for the bike, one number that tells a bigger story. today the number is the 89. percentage of people that used their cell phone at the last social gathering they intended. that was highlighted in a new york times op-ed. over the weekend, the author believes face-to-face conversation is a dying art, particularly for college students in our increasingly cyber connected world.
she points to a 2010 study that showed a 40% decline in empathy among college students, most of the drop coming after the year 2000. the best way to counter an ever more socially awkward world is to focus more on personal relationships and less on cell phones and other devices. you would think that would be easy in college. the on-demand economy needs -- meet education. an online education marketplace that is meant to close the skills gap in the work horse in -- workforce, perhaps in a more efficient way than traditional higher education can. for example, the rollout of i/o -- apple ios eight to nine, they saw student interest in relevant web developed courses rise to 30,000. joining me is the company's ceo. i'm fascinated by your model. i poked around a little, and i discovered i can learn how to cook thai food at which is something i've been wanting to do.
which is exciting for me. what is this distinction between learning something and becoming certified in something? how important is the certification in the workforce? guest: great question. it really depends on what the intent of the student is. we have plenty of students who are coming in to learn and they want to learn a very specific skill set. they want to come in, get a bite sized chunk of knowledge and then leave. they are not only interested in this signaling itself, they are interested in learning to develop the skill itself and they find that useful as is. but there are other people who have user experience, using currency as a signal to get new jobs. it is two different markets depending on what the goals are. brendan: are the employers coming along with you? do you need some sort of academy certification?
guest: you don't. what we find is at the end of the day, today in the market, you can see that it is so much easier to assess whether someone has the skills to be competent instead of just only having that signal. within the enterprise and businesses, we have companies just as -- such as citigroup u all usingdemy to help train employees. brendan: one of the things popping up on my facebook feed is offers from johns hopkins, stanford, and writing about to learn data management. how do you compete with an accredited organizations, the ability to take johns hopkins or stanford and put it guest: anywhere on my resume? guest: absolutely. at the end of the day there is a class of experts that come from traditional academia. we don't focus on only university partners. we have an entire marketplace model. we open it up to a community of experts. we don't actually believe it is possible to decide and determine
what it people want to learn in the future. we open it up to our community of experts to dictate which way people want to go. certainly, one way is to work with university partners. another is to work with every day experts actually working in these fields. brendan: what can primary and secondary schools learn from this? guest: let's face it, traditional education was built from a time that was a long time ago, and there has been a lot of changes in the world around us, especially in the world of work. as a result you have this gap between what traditional academia leaves off and what is happening in the rest of the world. we do feel like there is a little bit of a skills gap. the second piece is how people consume content and media today is different. structuring education around and experience in a classroom, or people on their devices, there a mismatch in terms of people's expectations in how they engage content outside of school. brendan: we are running out of time. i'm really curious what the , difference between what people
outside the u.s. want to learn, and what people inside the u.s. want to learn on your site. guest: today we are seeing a lot of similarities. early adopters around technology business and professional skills. but there are a lot of nuances in terms of what it is people want to learn and from whom. how do you learn leadership in germany may be different than in the u.s. brendan: dennis yang, the ceo. thank you. that does it for this edition of "bloomberg west." tomorrow on the show, all the details from google's nexus launch event. we will see you then. ♪ ♪